Hayfin today announced that it has entered into a strategic partnership with Samsung Life Insurance (“Samsung Life”). As part of this planned initiative, Samsung Life will acquire a minority stake in Hayfin from Arctos Partners (“Arctos”), a move jointly structured by Arctos and Hayfin to broaden Hayfin’s institutional shareholder base.
The transaction builds on Hayfin’s recently announced strategic partnership with Mubadala Investment Company (“Mubadala”) and AXA IM Prime, a business unit of AXA IM – part of the BNP Paribas Group (“AXA IM Prime”) – which saw Mubadala and AXA IM Prime each acquire a minority interest in Hayfin. Like Mubadala and AXA IM Prime, Samsung Life will support Hayfin’s investment strategies in tandem with becoming a minority shareholder. The transaction further strengthens Hayfin’s footprint in South Korea, reaffirming its commitment to clients in the region.
The addition of a third new institutional minority shareholder represents the next stage in a coordinated post-management buyout (“MBO”) plan led by Hayfin and Arctos, with Arctos continuing to provide long-term strategic support through its Keystone platform, which provides bespoke growth capital and liquidity solutions to leading financial sponsors. The resulting shareholding has enabled the Hayfin team to become majority owners of the firm’s common equity. Completion remains subject to customary regulatory approvals.
Tim Flynn, Co-Founder and Co-Chief Executive Officer at Hayfin, said: “This strategic partnership with Samsung Life is another strong endorsement of the franchise we have built. It completes our plan to bolster Hayfin’s shareholder base post-MBO through the addition of best-in-class institutions from across the globe onto our platform. Through establishing this partnership with Samsung, we look forward to deepening our commitment to the South Korean market, where we see investor demand for investment strategies continuing to grow.”
Joonkyu Park, CIO of Samsung Life Insurance, said: “We are very excited to partner with Hayfin, a recognised leader in the European market, and this strategic partnership will play a vital role in the growth and global expansion of Samsung Life’s asset management business. Hayfin has built an excellent long-term historic investment track record and will continue to provide a broad array of attractive investment opportunities, further strengthening our focus on the private capital market. We look forward to supporting Hayfin’s ongoing growth alongside Arctos, Mubadala, and AXA IM Prime.”
Hayfin today announced it has entered into strategic partnerships with Mubadala Investment Company (“Mubadala”) and AXA IM Prime, a business unit of AXA IM – part of BNP Paribas Group (“AXA IM Prime”), on behalf of one of its investment funds. As part of the agreement, each firm will acquire a minority interest from Arctos Partners (“Arctos”) in Hayfin and leverage their capabilities and expertise to support Hayfin’s investment strategies.
The transaction builds on the partnership between Hayfin and private investment firm Arctos. In February, Hayfin completed a management buyout (“MBO”) supported by Arctos via its Keystone strategy, which provides strategic partnerships to leading financial sponsors, through bespoke growth capital and liquidity solutions. The transaction facilitated the Hayfin team becoming majority owners of the firm’s common equity.
To enhance the MBO, Hayfin and Arctos jointly sought to distribute a portion of the firm’s institutional ownership to additional strategic minority shareholders. Mubadala and AXA IM Prime, alongside Arctos, will support the continued growth of Hayfin to further deliver on the firm’s long-term objectives of greater team ownership, alignment and incentivisation.
Hayfin will remain focused on generating superior and consistent risk-adjusted returns for its clients. As with the Arctos-backed buyout, the transaction will lead to no changes in Hayfin’s strategy, investment process, leadership or day-to-day operations. Completion remains subject to customary regulatory approvals.
Tim Flynn, Co-Founder and Co-Chief Executive Officer at Hayfin, said: “This is another landmark step, building on our partnership with Arctos, in what is an exciting new chapter for Hayfin. We are thrilled to welcome two best-in-class long-term partners in Mubadala and AXA IM Prime, each of whom represent strong endorsements of the platform we have built at Hayfin. Mubadala and AXA IM Prime bring unique perspectives and resources from around the globe that will support Hayfin’s ongoing growth and delivery of value for our clients, investors, borrowers and sponsors.”
“We are excited to partner with Hayfin as they embark on this new chapter of growth,” added Omar Eraiqaat, Deputy CEO of the Credit and Special Situations platform at Mubadala. “Their track record, investment discipline, and shared values with Mubadala make them an ideal fit for our long-term capital. This partnership reflects our conviction in Hayfin’s platform and leadership team and reinforces our strategy of backing high-quality asset managers that deliver value to all their stakeholders.”
Gilles Dusaintpère, Head of AXA IM Prime GP Stake investments at AXA IM said: “We are proud and excited to partner with Hayfin and to enhance our existing relationship. We fully endorse Hayfin’s development and long-term objectives of greater team ownership, alignment and incentivisation. Our investment strategy is designed to partner and align with best-in-class private markets players, and we look forward to supporting Hayfin and its team alongside Mubadala and Arctos.”
Hayfin has appointed Raj Paranandi as Chief Operating Officer (COO), based at the firm’s London headquarters.
Raj joins Hayfin from MarketAxess, an international financial technology company that operates the leading electronic trading platform for institutional credit markets, where he served as COO of EMEA and APAC. Prior to this, Raj spent 10 years in leadership positions at UBS and he comes with over 25 years of experience in Financial Services.
As COO, Raj will succeed Mark Tognolini, who will assume the role of co-Chief Executive Officer alongside Tim Flynn. This evolution in leadership reflects the collaborative management style that Mark and Tim have maintained since co-founding Hayfin and is designed to further strengthen the firm’s ability to serve its investors, borrowers, and partners.
Raj Paranandi, COO of Hayfin, said: “I am excited to be joining Hayfin as the firm continues to experience strong growth. With a deep origination network and unparalleled connections across the European market, the firm has established an enviable track record. I look forward to building on this as the business continues to scale, attracts talent and deepens its market footprint.”
Tim Flynn, co-CEO of Hayfin, said: “Mark and I are delighted to welcome Raj as COO of Hayfin. His deep experience and record will put the firm in great stead as we accelerate our expansion and capitalise on the growing credit opportunities for our investors.
This is an exciting period for the business. Our partnership with Arctos and established reputation for excellence enables us to navigate market volatility and geopolitical uncertainty while positioning the firm for continued success.”
This year looks like it might be a seminal year for private credit. The asset class continues to demonstrate secular growth – with no signs (that we can see) of reversing. At the same time, it has to navigate significant economic and political uncertainty driven by a tricky mix of rates, inflation, geopolitical uncertainty and unsustainable levels of government borrowing, particularly in the United States and the UK.
In Europe, private credit has matured significantly. Since 2008 our asset class has become a critical component of non-investment grade financing to business across Europe – and is beginning to play a more important role in investment grade financing. It has also become an important component of portfolio construction for LPs around the world searching for downside protected, lower volatility returns.
The question is: how will private credit perform if substantial economic headwinds materialize as the world adjusts to what appears to a changing world order? Is it the ‘golden age’ of private credit because any headwinds on the horizon will enable the better managers to prove they have in fact underwritten attractive risk adjusted returns? Or are the sceptics right who argue that in an industry that has grown very quickly, those who arrived late may be left nursing losses?
Meanwhile, the inauguration of Donald Trump – two months on from an election which had been a key point of discussion with our LPs, sandwiched as it was between our two AGMs in London and New York – heralds potentially significant political change in the USA. The prospect of a second Trump term prompted a rally in equity markets and other asset classes but drove volatility elsewhere. While tariffs were a conspicuous omission from the new administration’s early barrage of executive orders, they remain firmly on the agenda and a reshaping of global trade patterns looks likely to remain a major theme in 2025. What might lay ahead no one can say with certainty. One thing does seem clear: Trump’s second term in office is likely to reshape the American political landscape and disrupt convention across the globe.
However, looking at the geopolitical landscape, we’re of the opinion that turbulence should be expected, and the resulting change in market technicals will shift capital allocation decisions, impacting a range of asset classes including private credit.
What does this mean for private credit 2025?
Despite the convulsions facing the global economy, we remain confident that both private credit as an asset class, and Hayfin as a manager in particular, are well-equipped to effectively weather these elevated levels of risk and uncertainty.
We’ve been here before during previous financial crises – most recently in COVID-19. Alternative investment managers like Hayfin are resolutely focused on mitigating risk. We’re students of the market. We bake uncertainty at its most fundamental level into our investment analysis, judiciously assessing the assets, sectors and markets in which we invest and the types of opportunities that will protect capital and yield results in the long-term.
A prerequisite to this is having the ability to originate deals and manage investments in an uncertain environment. The market has evolved significantly in the past 18 months, impacted by the resurgence of leveraged loan markets and a build-up of dry powder.
Private debt investors like Hayfin have had to respond to intensified competition and a changing opportunity set. The ability to originate a diverse range of deals gave us an important edge. The breadth of investment opportunities we can source and execute allowed us to continue deploying significant volumes of capital through our flagship Direct Lending strategy in 2024.
That is a function of how we have built our business. The same investment in our team, and in our capacity to manage a large volume of credit assets, was what enabled us to scale up our lending activity during the pandemic in 2020-21, while others were focused on managing their existing books. Sourcing deals from market niches that other lenders might overlook is also typical of our approach: when others zig, we zag. There are parallels with how we maintained discipline in terms of deployment at the outset of the supposed ‘golden age’ of 2022, when capital was readily flowing into the asset class.
And we believe our firm will go from strength to strength in 2025. Hayfin’s position as one of Europe’s leading alternative asset managers puts us in good stead to continue capitalising on opportunities for our investors.
That said, we cannot afford to rest on our laurels. It is important we continue to attract and retain our top talent to cement the strong market position that we have built over the last decade.
That is why we are so excited about our agreement with Arctos. It offers greater ownership and autonomy for our team, strategic and cultural alignment with our shareholders and ongoing capital support to fuel our continued growth. In short – more Hayfin.
Our next chapter for growth
Amidst the geopolitical uncertainties that will characterize 2025, we are committed to our disciplined risk management approach and will remain defined by our resilience and innovation. This will enable us to continue our focus on strategic execution, as well as delivering strong and consistent returns for investors regardless of the macroeconomic environment.
This new, next chapter of our growth holds great promise for Hayfin. While the core services and expertise that have shaped and defined the business will remain at Hayfin’s heart, we have put ourselves in an exciting position to look at new opportunities to expand and evolve our existing offering. The Hayfin playbook has never been better placed to help navigate the business through future market conditions and ensure we achieve consistent and superior risk-adjusted returns for our LPs.
Our main reasons for this view, outlined in greater detail in this paper, are:
- Europe remains a more bank-centric market with less sophisticated capital markets than the US, meaning it remains ripe for further disruption by private credit.
- Europe’s implementation of recent regulatory and banking supervisory standards presents an additional opportunity for private credit to gain additional market share.
- An established local presence across Europe provides access to differentiated deal flow where the competitive dynamics are more in the lender’s favour.
- The perception of the US as a more creditor-friendly jurisdiction than certain Western European markets is an oversimplification, with recovery rates in Europe historically being higher than in the US.
Why Europe? Market Considerations for Private Credit
Hayfin co-founder and CEO Tim Flynn was featured on Private Market Talks providing insight into the Hayfin team’s dynamic, innovative approach to direct lending and leveraged finance. Tim reflected on learnings from his career journey, from starting out as a beekeeper to founding a leading European alternative asset management firm, and how he applies the learnings from each experience to continue to enhance the Hayfin business. He also provides a view on the opportunities and challenges he sees within the private markets, and how these are informing Hayfin’s strategy.